The set-up: Cidara Therapeutics (CDTX) develops antibiotic drugs with a focus on treatment of serious fungal infections. It’s due to release results on a Phase 2 trial of echinocandin (CD101) in candidemia, with results expected in the fourth quarter. The stock value was cut in half in February, dropping from $11.70 to below $6, after disappointing Phase 2 trial data on a topical version of the same drug.
Why I like it: I like the company, the management team and the catalyst. I like the chances of them having positive data in Q4. This formulation is being delivered intravenously, and IV delivery of antibiotics usually is much more effective, and safer as well. I like that they’re an antibiotic company, because those tend to be a bit less risky. I also like the management team; Jeffrey Stein, Cidara’s CEO, used to run a company called Trius Therapeutics, which developed an antibiotic called tedizolid, got it through Phase 3 trials and was acquired by Cubist Pharmaceuticals, Inc. in 2013 for a nice premium.
How I’m playing it: I’ve added CDTX to my watch list, looking to buy it on dips. I think it’s a good buy between $6 and $6.50, with the potential to have a nice catalyst run up to $8; if they report positive data – though I typically sell stocks before the catalyst event occurs — CDTX could go back up to $10 a share, and maybe all the way up to $12.
Kyle Dennis runs Kyle Dennis’ Biotech Breakouts (biotechbreakouts.com). He is an event-based trader, who prefers low-priced and small-cap biotech stocks. He currently has no shares, options or open orders in CDTX; he last owned the stock on April 26, when he played it as a day trade.
You may also like
Exclusive System Tracks Wall St. Insiders
“Dollar Ace Simply Exposes Information That Wall Street Wants To Keep Quiet” Said Kyle Dennis
“One member, Wesley M., has already reported 360%+ gains in just a few short days. Don’t miss this!”
(Reserve Access Now)
“What Recession?!” Jason Bond nets $55,060 in realized profit in One Day
After going 6 for 6 on profitable trades recently, we caught up with Jason to ask how he did it.
Check out Jason’s exclusive interview revealing this tightly guarded strategy. (Watch Now)
RagingBull.com Co-Founder, Jeff Bishop, Launches High Conviction Trade Service
“We listen to our clients and we give them EXACTLY what they want, so we designed a service to deliver 1 trade, 1 time a week, with a 100%+ PROFIT TARGET, directly to your inbox every Monday before the market opens. (Read More)